Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

安徽海螺水泥股份有限公司 ANHUI CONCH CEMENT COMPANY LIMITED (a joint stock limited company incorporated in the People’s Republic of ) (Stock Code: 00914)

Results for the year ended 31 December 2020

Revenue of the Company for the year 2020 amounted to approximately RMB176,242.68 million (in accordance with the International Financial Reporting Standards (“IFRSs”)), representing an increase of 12.23% over that of 2019.

Net profit attributable to equity shareholders of the Company for the year 2020 amounted to approximately RMB35,163.54 million (in accordance with the IFRSs), representing an increase of 4.56% over that of 2019.

Earnings per share for the year 2020 were RMB6.64 (in accordance with the IFRSs), representing an increase of 4.56% over that of 2019.

Unless otherwise stated, the currency unit in this announcement is Renminbi (“RMB”), the lawful currency of the People’s Republic of China (“PRC”). Unless otherwise stated, the financial information in this announcement is prepared in accordance with the China Accounting Standards for Business Enterprises (2006) (“PRC Accounting Standards”).

I. Basic Corporate Information of the Company 1. Basic information Company Name Anhui Conch Cement Company Limited (“the Company”, together with its subsidiaries , the “Group”) A Shares stock abbreviation Conch Cement A Shares stock code 600585 Exchange on which A shares (“A Shares”) are listed The (“SSE”) H Shares stock abbreviation Conch Cement H Shares stock code 00914 Exchange on which H shares (“H Shares”) are listed The Stock Exchange of Hong Kong Limited (“Stock Exchange”)

1 2. Contact persons and means of contact Title Joint Company Secretary Securities Affairs Representative Name Yu Shui Liao Dan Contact address No. 39 Wenhua Road, Wuhu No. 39 Wenhua Road, Wuhu City, City, Anhui Province, the PRC Anhui Province, the PRC Telephone number 0086-553-8398976 0086-553-8398911 Fax number 0086-553-8398931 0086-553-8398931 E-mail address [email protected] [email protected]

II. Summary of Accounting Data and Operational Information 1. Financial Summary prepared in accordance with the IFRSs (for the year ended 31 December) (Unit: RMB’000) Item 2020 2019 2018 2017 2016

Revenue 176,242,682 157,030,328 128,402,626 75,310,820 55,931,901 Net profit attributable to equity shareholders 35,163,538 33,629,803 29,858,303 15,898,689 8,573,868 of the Company Total assets 200,972,758 178,777,182 149,547,352 122,142,585 109,514,121

Total liabilities 32,909,849 36,646,408 33,358,169 30,453,291 29,536,289

2. Accounting data prepared in accordance with the PRC Accounting Standards (major accounting data and financial indicators for the preceding three years)

Table 1: (Unit: RMB’000) Year-on-year change (%) Item 2020 2019 2018 between 2020 and 2019 Revenue 176,242,682 157,030,328 12.23 128,402,626

Profit before taxation 47,107,917 44,556,845 5.73 39,629,196 Net profit attributable to equity 35,129,691 33,592,755 4.58 29,814,285 shareholders of the Company Net profit after extraordinary items attributable to equity shareholders of 33,170,447 32,719,396 1.38 29,818,520 the Company Basic earnings per share (RMB/share) 6.63 6.34 4.58 5.63 Diluted earnings per share 6.63 6.34 4.58 5.63 (RMB/share)

2 Basic earnings per share after 6.26 6.17 1.38 5.63 extraordinary items (RMB/share) Decreased by 2.75 Diluted return on net assets (%) 21.71 24.46 26.46 percentage points Weighted average return on net assets Decreased by 3.41 23.62 27.03 29.66 (%) percentage points Diluted return on net assets after Decreased by 3.32 20.50 23.82 26.46 extraordinary items (%) percentage points Weighted average return on net assets Decreased by 4.02 22.31 26.33 29.66 after extraordinary items (%) percentage points Net cash flow generated from 34,797,213 40,738,205 -14.58 36,058,967 operating activities Net cash flow per share generated from operating activities 6.57 7.69 -14.58 6.80 (RMB/share)

Table 2: (Unit: RMB’000) Year-on-year As at 31 As at 31 As at 31 change (%) Item December December December between 2020 2020 2019 2018 and 2019 Total assets 200,972,758 178,777,182 12.42 149,547,352 Total equity attributable to equity 161,822,228 137,361,682 17.81 112,688,916 shareholders of the Company Net assets per share attributable to equity shareholders of the Company 30.54 25.92 17.81 21.26 (RMB/share) III. Shareholders

1. Shareholders

(1) As at 31 December 2020, the total number of registered shareholders of the Company was 307,848, of which 84 were registered holders of H Shares. As at 28 February 2021, the total number of registered shareholders of the Company was 381,338, of which 84 were registered holders of H Shares.

(2) As at 31 December 2020, the shareholdings of the top 10 registered shareholders of the Company are set out as follows: Number of shares Pledged or frozen Percentage of Nature of held as at 31 Class of No. Name of shareholder shareholding Number shareholder December 2020 shares (%) Status of shares (share) (Share) Anhui Conch Holdings Co., Ltd. State-owned 1 1,928,870,014 36.40 A Share Nil - (“Conch Holdings”)(Note 1) legal person

3 Foreign 2 HKSCC Nominees Limited (Note 2) 1,298,428,110 24.50 Unknown Unknown legal person Hong Kong Securities Clearing Foreign 3 371,850,044 7.02 A Share Unknown Unknown Company Limited legal person

China Securities Finance State-owned 4 158,706,413 2.99 A Share Unknown Unknown Corporation Limited legal person

Central Huijin Asset Management State-owned 5 70,249,600 1.33 A Share Unknown Unknown Ltd. legal person

Domestic Anhui Conch Venture Investment non-state- 6 40,550,000 0.77 A Share Nil - Co., Ltd. owned legal person Hillhouse Capital Management 7 Others 37,322,610 0.70 A Share Unknown Unknown Co., Ltd. – HCM China Fund

8 Bank Negara Malaysia Others 32,270,473 0.61 A Share Unknown Unknown

Zhejiang Yiwu Tanzhen Investment Management Partnership (Limited Partnership)- 9 Others 18,372,688 0.35 A Share Unknown Unknown Loyal Valley Capital (Tanzhen) Value China Exclusive Private Equity Investment Fund

Industrial & Commercial – SSE 50 Trading 10 Others 17,861,146 0.34 A Share Unknown Unknown Open-end Index Securities Investment Fund Notes: (1) During 1 January 2020 to 31 December 2020 (“the Reporting Period”), there was no change in the number of the shares of the Company held by Conch Holdings. The shares held by Conch Holdings were not subject to any pledge, freezing order or trust. (2) HKSCC Nominees Limited held 1,298,428,110 H Shares, representing 24.50% of the total share capital of the Company, and 99.91% of the issued H Shares of the Company. These shares were held on behalf of its various clients. (3) All the above shares are floating shares not subject to trading restrictions. (4) The board (“Board”) of directors (“Directors”) of the Company is not aware of any connected relationship or acting in concert relationship among the above-mentioned shareholders.

2. Information on the controlling shareholder and de facto controller

During the Reporting Period, there was no change in the controlling shareholder and de facto controller of the Company.

As at 31 December 2020, Conch Holdings was the controlling shareholder of the Company and State-owned Assets Supervision and Administration Commission of Anhui Province

4 was the de facto controller of the Company. The shareholding relationship structure between the Company and its de facto controller is set out as follows:

State-owned Assets Supervision and Administration Commission of Anhui Province

100%

Anhui Provincial Investment Group Holdings Co., Ltd.

51%

Anhui Conch Holdings Company Limited

36.40%

Anhui Conch Cement Company Limited

3. Purchase, sale or redemption of listed securities

During the Reporting Period, neither the Company nor its subsidiaries purchased, sold or redeemed any listed securities of the Company. IV. Interests of directors, supervisors and chief executive in share capital

During the Reporting Period, none of the Directors, supervisors and chief executive of the Company and their respective spouses and children under the age of 18 had any interests and/or short positions in shares, underlying shares, debentures of the Company or its associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (“SFO”), nor had they been granted any rights to subscribe for or exercised the above rights to subscribe for shares or debentures of the Company or its associated corporation as defined in Part XV of the SFO. Such interests or short positions shall be recorded in the register required to be kept and prepared by the Company under Section 352 of the SFO; or otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers under Appendix 10 to the Rules Governing the Listing of Securities of the Stock Exchange (“HKSE Listing Rules”). V. Corporate Governance

During the Reporting Period, the Company complied with all the code provisions as set out in the Corporate Governance Code in Appendix 14 to the HKSE Listing Rules. VI. Review of Annual Report

5 The financial report and results announcement of the Company for the year ended 31 December 2020 have been reviewed by the audit committee of the Board. All of the Directors agree and confirm their individual and collective responsibility for preparing the accounts as contained in the financial report for the year under review. The Directors are responsible for the preparation of the financial statements for the relevant accounting periods under applicable statutory and regulatory requirements which give a true and fair view of the financial status, the results of operations and cash flows of the Group. In preparing the financial statements for the year ended 31 December 2020, applicable accounting policies have been adopted and applied consistently. VII. Management Discussion and Analysis on the Operations of the Group

ANALYSIS ON THE OPERATIONAL CONDITIONS FOR 2020

(1) Overview of operation development

In 2020, facing the complicated international and domestic situations, the Group strove to mitigate the impact of the COVID-19 epidemic, floods and other adverse factors by actively carrying out epidemic prevention and control measures, accelerating the resumption of work and production, and focusing on the keynote of the supply side structural reform of the industry to promote high-quality development. By strengthening the research and assessment of the market supply and demand situation, persisting in its adoption of a differentiated marketing strategy, the Group was able to keep reasonable pace of production and sales, maintain stable market share, fully capitalize on the platform's bulk purchase advantages, and strengthen operation management and control performance indicators. As a result, the quality of production and operation improved steadily, and the operating results reached a record high.

During the Reporting Period, in accordance with the PRC Accounting Standards, the Group’s revenue amounted to RMB176,243 million, representing an increase of 12.23% from that for the corresponding period of the previous year; net profit attributable to equity shareholders of the Company amounted to RMB35,130 million, representing an increase of 4.58% from that for the corresponding period of the previous year; and earnings per share were RMB6.63, representing an increase of RMB0.29 per share from that for the corresponding period of the previous year. In accordance with the IFRSs, revenue amounted to RMB176,243 million, representing an increase of 12.23% from that for the corresponding period of the previous year; net profit attributable to equity shareholders of the Company amounted to RMB35,164 million, representing an increase of 4.56% from that for the corresponding period of the previous year; and earnings per share were RMB6.64, representing an increase of RMB 0.29 per share from that for the corresponding period of the previous year.

During the Reporting Period, the Group steadily proceeded with the construction, mergers

6 and acquisitions of domestic and overseas projects. One clinker production line and two cement grinding units of Tibet Basu Conch Cement Co., Ltd. were completed and put into operation. The Company merged and acquired Wuhu South Cement Co. Ltd.* (“Wuhu South Cement”), adding three clinker production lines and three cement grinding units. The Company also acquired the assets of Hainan Chahe Cement Plant and established Hainan Changjiang Conch Cement Co., Ltd.*, adding two clinker production lines and two cement grinding units. In terms of overseas development, one clinker production line and two cement grinding units of Myanmar Conch (Mandalay) Cement Co., Ltd. have been completed and put into operation. By strengthening its overseas presence and increasing its efforts in market expansion, the overall operating quality of the Group’s projects in operation has been persistently improved. Construction and proposed construction projects in regions including Southeast Asia and Central Asia are in orderly progress.

During the Reporting Period, the Group increased the production capacity of clinker, cement, aggregates, and commercial concrete by 9.00 million tonnes, 10.45 million tonnes, 3.00 million tonnes and 1.20 million cubic meters, respectively. As at the end of the Reporting Period, the Group’s production capacity of clinker, cement, aggregates and commercial concrete amounted to 262 million tonnes, 369 million tonnes, 58.30 million tonnes and 4.20 million cubic meters respectively.

(2) Major operational information during the Reporting Period

1. Analysis of revenue and cost

Principal activities by industry, product and region Principal activities by industry

Year-on- Gross Year-on- Year-on-year Operating Operating year profit year change change in Industry revenue cost change in margin in operating gross profit (RMB’000) (RMB’000) operating (%) revenue (%) margin cost (%) Building material Increased by industry 0.42 106,885,455 56,054,108 47.56 -2.62 -3.40 (sale of self-produced percentage products) point Increased by Building material 0.07 industry 41,068,234 40,971,844 0.23 7.09 7.02 percentage (trading business) point Principal activities by product

Year-on- Year-on- Gross Year-on-year Operating Operating year change year profit change in Product revenue cost in operating change in margin gross profit (RMB’000) (RMB’000) revenue operating (%) margin (%) cost (%)

7 Building material Increased by industry (sale of 1.04 82,484,903 43,094,102 47.76 4.27 2.23 self-produced products) percentage – 42.5-grade cement Note 1 points Building material Decreased by industry (sale of 0.12 13,640,985 7,037,608 48.41 -33.28 -33.12 self-produced products) percentage – 32.5-grade cement point Building material Decreased by industry (sale of 2.28 9,524,000 5,434,101 42.94 4.41 8.75 self-produced products) percentage –Clinker points Building material Decreased by industry (sale of 2.26 1,025,462 324,704 68.34 0.30 8.02 self-produced products) percentage – Aggregate and carpolite points Building material Decreased by industry (sale of 2.81 210,105 163,593 22.14 197.10 208.21 self-produced products) percentage – Commercial concrete points Increased by Building material 0.07 industry (trading 41,068,234 40,971,844 0.23 7.09 7.02 percentage business) point Principal activities by region Year-on- Year-on- Gross Year-on-year Operating Operating year change year profit change in Region revenue cost in operating change in margin gross profit (RMB’000) (RMB’000) revenue operating (%) margin (%) cost (%) Building material Increased by industry (sale of 1.46 30,799,830 15,109,923 50.94 -0.08 -2.96 self-produced products) percentage – East China Note 2 points Building material Increased by industry (sale of 0.24 34,755,436 17,516,465 49.60 -0.66 -1.14 self-produced products) percentage – Central China Note 3 point Building material Increased by industry (sale of 2.99 18,799,271 9,395,163 50.02 5.40 -0.55 self-produced products) percentage – South China Note 4 points Building material Decreased by industry (sale of 3.61 19,435,862 11,978,830 38.37 -15.43 -10.16 self-produced products) percentage – West China Note 5 points Building material Decreased by industry (sale of 0.66 437,192 312,381 28.55 -44.06 -43.55 self-produced products) percentage – Export point

8 Building material Decreased by industry (sale of 5.95 2,657,864 1,741,346 34.48 12.80 24.07 self-produced products) percentage – Overseas points Increased by Building material 0.07 industry (trading 41,068,234 40,971,844 0.23 7.09 7.02 percentage business) point Notes: 1. 42.5-grade cement includes cement of grade 42.5 and above; 2. East China mainly includes Jiangsu, Zhejiang, Shanghai, Fujian and Shandong, etc; 3. Central China mainly includes Anhui, Jiangxi and Hunan, etc; 4. South China mainly includes Guangdong, Guangxi and Hainan; 5. West China mainly includes Sichuan, Chongqing, Guizhou, Yunnan, Gansu, Shaanxi and Xinjiang, etc.

Sales by industry

During the Reporting Period, the Group realized an aggregate net sales volume of cement and clinker of 453 million tonnes, representing a year-on-year growth of 4.69%. Revenue generated from principal activities reached RMB147,954 million, representing a year-on-year decrease of 0.11%. Operating cost increased by 0.74% on a year-on-year basis to RMB97,026 million. The consolidated gross profit margin of products recorded a year-on-year decrease of 0.55 percentage point to 34.42%.

The Group realised a sales volume of self-produced products of cement and clinker of 325 million tonnes, representing a year-on-year growth of 0.70%. Sales revenue from self-produced products amounted to RMB106,885 million, representing a year-on-year decrease of 2.62%. Cost of sales of self-produced products decreased by 3.40% year-on-year to RMB56,054 million. The consolidated gross profit margin of self-produced products recorded a year-on-year increase of 0.42 percentage point to 47.56%.

In order to strengthen the development of end-user sales markets, during the Reporting Period, the Group realised a sales volume of 128 million tonnes for its cement and clinker trading business, representing a year-on-year increase of 16.47%. Revenue from trading business amounted to RMB41,068 million, representing a year-on-year growth of 7.09%. Cost of trading business increased by 7.02% year-on-year to RMB40,972 million.

Sales by type of products

During the Reporting Period, gross profit margin of the Group’s 42.5-grade cement decreased by 0.31 percentage point year-on-year, gross profit margin of the 32.5-grade cement increased by 0.48 percentage point year-on-year, gross profit margin of clinker decreased by 1.32 percentage points year-on-year, among which, gross profit margin of the Group’s self-produced products of the 42.5-grade cement increased by 1.04 percentage points year-on-year, and gross profit margins of the Group’s 32.5-grade cement and clinker

9 decreased by 0.12 percentage point and 2.28 percentage points year-on-year, respectively. Consolidated gross profit margin of aggregate and carpolite decreased by 2.26 percentage points year-on-year to 68.34%. Consolidated gross profit margin of commercial concrete was 22.14%, representing a year-on-year decrease of 2.81 percentage points.

Sales by region

During the Reporting Period, due to a year-on-year decrease in selling prices of products, sales amount of the Group’s self-produced products decreased by varying degrees in different regions in China, except the southern region.

In East China and Central China, affected by COVID-19 and flood disaster along the Yangtze River Valley, the market demand was suppressed in phases, price dropped and sales amount in East China and Central China decreased by 0.08% and 0.66% year-on-year respectively, while gross profit margins rose by 1.46 percentage points and 0.24 percentage point year-on-year respectively, benefiting from a decrease in cost of self-produced products.

In South China, through strengthening marketing coordination and management, the Group achieved increases in sales volume and selling price, and recorded a year-on-year increase of 5.40% in sales amount; gross profit margin increased by 2.99 percentage points year-on-year.

In West China, affected by the decrease in selling price to a greater extent, sales amount decreased by 15.43% year-on-year; gross profit margin decreased by 3.61 percentage points year-on-year.

Affected by the pandemic overseas, export sales volume decreased by 51.14% year-on-year and export sales amount dropped by 44.06% year-on-year. With the successive completion and operation of overseas projects and continued improvement of sales market network, overseas project companies recorded year-on-year increases of 17.97% and 12.80% in sales volume and sales amount respectively. 2. Profit analysis Major items in the income statement prepared in accordance with the PRC Accounting Standards Amount Change from that of the Items 2020 2019 corresponding period of (RMB’000) (RMB’000) the previous year (%) Revenue from principal 147,953,689 148,114,263 -0.11 activities Profit from operations 46,270,771 44,057,338 5.02

Profit before taxation 47,107,917 44,556,845 5.73

Net profit attributable to equity shareholders of the 35,129,691 33,592,755 4.58 Company

10 During the Reporting Period, due to the year-on-year decrease in the selling price of products, the Group’s revenue from principal activities decreased by 0.11% year-on-year. Benefiting from the decreases of the product costs and expenses for the period, the Group’s profit from operations, profit before taxation and net profit attributable to equity shareholders of the Company recorded year-on-year increases of 5.02%, 5.73% and 4.58% respectively.

3. Analysis of costs and expenses

Consolidated costs of cement and clinker for 2020 and their year-on-year changes 2020 2019 Change in Change costs Items Unit costs Unit costs in costs proportion (RMB/ Percentage (RMB/ Percentage (%) (percentage tonne) (%) tonne) (%) points) Raw materials 45.24 26.49 44.17 24.75 2.42 1.74

Fuel and power 86.73 50.79 94.47 52.93 -8.19 -2.14 Depreciation 11.70 6.85 12.03 6.74 -2.75 0.11 expense Labor cost and 27.08 15.87 27.80 15.58 -2.56 0.29 others Total 170.75 100 178.47 100 -4.32 -

Note: All cost items mentioned above represent the costs of the Company’s self-produced products of cement and clinker, excluding cost of the trading business.

During the Reporting Period, the consolidated costs of the Company’s cement and clinker decreased by 4.32% year-on-year, which was mainly due to a year-on-year decrease of the purchase price of raw coal and the continuous optimization of the production and operation indicators of the Company. Changes in major expense items prepared in accordance with the PRC Accounting Standards As a As a percentage Change in Change from percentage of of revenue percentage of that of the revenue from 2020 2019 from revenue from Expenses for the corresponding principal amount amount principal principal period period of the activities for (RMB’000) (RMB’000) activities for activities previous year the Reporting the same (percentage (%) Period (%) period last points) year (%)

Selling expenses 4,123,287 4,416,575 -6.64 2.79 2.98 -0.19

Administrative 4,207,237 4,741,154 -11.26 2.83 3.20 -0.37 expenses

11 Research and development 646,582 187,199 245.40 0.44 0.13 0.31 expenses Financial expenses (income is stated in -1,514,772 -1,338,169 -13.20 -1.02 -0.90 -0.12 negative)

Total 7,462,334 8,006,759 -6.80 5.04 5.41 -0.37

During the Reporting Period, the Group’s research and development expenses increased by 245.40% on a year-on-year basis, mainly due to the year-on-year increase in expenditures for the development of ultra-low emission technologies and green energy development projects for cement manufacturing by subsidiaries of the Group. During the Reporting Period, the Group’s selling, administrative, research and development and financial expenses in aggregate as a percentage to revenue generated from principal activities was 5.04%, representing a decrease of 0.37 percentage point year-on-year, mainly due to the year-on-year decreases in the administrative expense and selling expense and the increase in deposit interest income. Excluding the effect of trading business income, the Group’s selling, administrative, research and development and financial expenses in aggregate as a percentage to revenue generated from principal activities was 6.98%, representing a decrease of 0.31 percentage point year-on-year. 4. Financial position Asset and liability overview Changes in assets and liabilities prepared in accordance with the PRC Accounting Standards Change as at the end of As at 31 December As at 31 December the Reporting Period as Items 2020 2019 compared to those at the (RMB’000) (RMB’000) beginning of the year (%)

Fixed assets 62,720,184 58,858,416 6.56 Current and other 138,252,574 119,918,766 15.29 assets Total assets 200,972,758 178,777,182 12.42

Current liabilities 24,223,118 27,421,190 -11.66 Non-current 8,532,820 9,035,543 -5.56 liabilities Total liabilities 32,755,938 36,456,733 -10.15 Non-controlling 6,394,592 4,958,767 28.96 interests Equity attributable to equity 161,822,228 137,361,682 17.81 shareholders of the Company Total liabilities and 200,972,758 178,777,182 12.42 equity

12 As at the end of the Reporting Period, the Group’s total assets prepared in accordance with the PRC Accounting Standards amounted to RMB200.973 billion, representing an increase of 12.42% as compared to those at the end of the previous year. Total liabilities amounted to RMB32.756 billion, representing a decrease of 10.15% as compared to those at the end of the previous year; among which the current liabilities amounted to RMB24.223 billion, representing a decrease of 11.66% as compared to those at the end of the previous year; and non-current liabilities amounted to RMB8.533 billion, representing a decrease of 5.56% as compared to those at the end of the previous year. As at 31 December 2020, the Group’s gearing ratio calculated in accordance with the PRC Accounting Standards was 16.30%, representing a decrease of 4.09 percentage points as compared to that at the end of the previous year.

As at the end of the Reporting Period, equity attributable to equity shareholders of the Company amounted to RMB161.822 billion, representing an increase of 17.81% as compared to that at the end of the previous year; shareholders’ equity attributable to minority shareholders amounted to RMB6.395 billion, representing an increase of 28.96% as compared to that of the end of previous year; as at the end of the Reporting Period, net assets per share attributable to equity shareholders of the Company amounted to RMB30.54, representing an increase of RMB4.62 per share as compared to that at the end of the previous year.

As at 31 December 2020, the total current assets and total current liabilities of the Group prepared in accordance with the PRC Accounting Standards amounted to RMB112.980 billion and RMB24.223 billion respectively, with a current ratio of 4.66:1 (corresponding period last year:3.54:1). The year-on-year increase in current ratio was mainly due to the increase in current assets including cash balance. The total current assets and total current liabilities of the Group prepared in accordance with the IFRSs amounted to RMB113.106 billion and RMB24.223 billion respectively, with a net gearing ratio of -0.038 (corresponding period last year:-0.072). Net gearing ratio was calculated as follows: (interest-bearing liabilities minus cash and cash equivalents) divided by shareholders’ equity. Liquidity and source of funds Maturity analysis of bank loans and other borrowings of the Group as at the end of the Reporting Period is as follows: As at 31 December 2020 As at 31 December 2019 (RMB’000) (RMB’000) Due within 1 year 3,109,211 3,917,815 Due after 1 year but within 2 1,245,180 991,555 years Due after 2 years but within 5 1,563,500 2,524,737 years Due after 5 years 501,000 355,000 Total 6,418,891 7,789,107

13 As at the end of the Reporting Period, the Group’s bank borrowings were RMB6.419 billion, representing a decrease of RMB1.370 billion as compared to those at the beginning of the year. The decrease was mainly attributable to the repayment of due loans during the Reporting Period.

Save for the aforesaid borrowings, the Group had corporate bonds in a principal amount of RMB3.499 billion which would be due after 1 year but within 2 years.

During the Reporting Period, the Group’s source of funding was mainly from the net cash flow generated from operating activities and the cash flow generated from realization of investment. Analysis of cash flow Comparison of net cash flow prepared in accordance with the PRC Accounting Standards 2020 2019 Changes (RMB’000) (RMB’000) (%) Net cash flow generated from operating 34,797,213 40,738,205 -14.58 activities Net cash flow generated from investment -26,772,879 -20,688,848 -29.41 activities Net cash flow generated from financing -13,262,021 -7,911,895 -67.62 activities Effect of exchange rate movement on cash and -100,073 19,011 -626.40 cash equivalents Net (decrease)/ increase in cash and cash -5,337,761 12,156,473 -143.91 equivalents Balance of cash and cash equivalents at the 22,014,145 9,857,672 123.32 beginning of the year Balance of cash and cash equivalents at the end 16,676,384 22,014,145 -24.25 of the year

During the Reporting Period, the Group’s net cash flows generated from operating activities amounted to RMB34.797 billion, representing a year-on-year decrease of RMB5.941 billion. Such decrease was mainly due to a year-on-year increase in the Group’s cash outflows in purchasing commodities during the Report Period.

During the Reporting Period, the Group’s net cash outflows from investment activities increased by RMB6.084 billion as compared to that of last year, mainly due to that the fixed term deposits with maturity over three months subscribed by the Group and wealth management products have not reached maturity during the Reporting Period.

During the Reporting Period, the Group’s net cash outflows from financing activities increased by RMB5.350 billion as compared to that of last year, primarily attributable to a

14 year-on-year increase in the payment of cash dividends to shareholders for the previous year by the Group.

5. Capital expenditure

During the Reporting Period, capital expenditure of the Group amounted to approximately RMB10.883 billion, which was primarily used in the construction of cement and clinker production lines, the technology modification for energy conservation and environmental protection, investment in residual heat generation projects and the construction of aggregate projects, as well as used for the expenditure in mergers and acquisitions projects.

As at the end of the Reporting Period, capital commitments in respect of the purchase of machinery and equipment for production that were committed but have not been provided for in the accounts are set out as follows: As at 31 December 2020 As at 31 December 2019 (RMB’000) (RMB’000)

Authorized and contracted for 3,798,327 3,979,444

Authorized but not contracted for 1,426,512 871,538

Total 5,224,839 4,850,982

OUTLOOK FOR 2021

2021 marks the ground-breaking year of the “14th Five-Year Plan”, in which the central government will adhere to the main theme of making progress while maintaining stability. Under the commencement of the new development stage, the new development concept will be upheld and a new development landscape will be constructed. Aiming to promote high-quality development, with deepening the supply-side structural reforms as the main line, and fundamentally driven by reform and innovation, it will consolidate and expand the results of epidemic prevention and control as well as economic and social development and steadily develop the “six stabilities” (六穩), fully implement the “six guarantees” (六保), and implement scientific and accurate macroeconomic policies which require proactive fiscal policies to be aimed at improving quality and efficiency and being more sustainable, and prudent monetary policies to be agile, precise and reasonable. It will persistently adopt the strategy of boosting domestic demand and high-level opening-up, focus on creating a smooth economic cycle, and strive to keep the economy operations within a reasonable range. A year-on-year GDP growth rate of more than 6% for the entire year is anticipated. (Source: Government Work Report of 2021)

In 2021, the state will increase effective investments and continue to support major construction projects which can boost regional coordinated development. It will speed up the construction of new infrastructure, drive investment demand with new urbanization, implement urban renovation actions, promote the transformation of decrepit urban

15 communities, and promote the integrated development of city clusters and metropolitan areas; it will also accelerate the construction of a transportation powerhouse, and provide strong support for infrastructure investment. In respect of real estate, the state adheres to the positioning of "houses are for inhabitation and not for speculation" to promote the healthy and stable development of the real estate market. However, with the introduction of new financing regulations for real estate enterprises and the continuous tightening of regulations, new construction in the real estate industry will face downward pressure, which may affect the demand for the cement market to a certain degree. At the same time, the state will continue to make greater efforts on ecological and environmental treatment, strengthen the comprehensive treatment of air pollution, strive for peaking carbon emissions and carbon neutrality, and achieve the synergy of reducing pollution and carbon. The continuous normalization of off-peak production in the cement industry has a positive effect on mitigating supply contraction and absorbing excess capacity. However, some regions will still face pressure to increase production capacity, which may have a certain impact on several local markets.

In respect of investment development, the Group will continue to steadily advance its international development. We will pursue the simultaneous development of new construction and mergers and acquisitions, actively seek development opportunities, accelerate the implementation of contracted projects and the construction of launched projects, and further improve the quality and achieve the greater effectiveness of projects that are under operation. The Group will step up efforts to accelerate domestic development. We will follow the guidance of Company's "14th Five-Year Plan" in order to optimize the strategic layout, enhance the control of the regional market, accelerate the construction of projects, and seek potential acquisition targets. The Group will continuously accelerate the extension of the upstream and downstream industrial chains. We will fully expand the aggregates industry, strengthen the operation and management of the projects and fully capitalize production capacity; and improve the commercial models for commercial concrete projects, thereby further expanding the industry scale. We will comprehensively summarize the experience of prefabricated construction projects and focus on strengthening market development, so as to ensure that its production and operation would gradually enter into a virtuous cycle.

In 2021, the Group’s planned capital expenditures will amount to approximately RMB15.0 billion, which will be funded primarily by internal resources and will be used mainly for project construction, energy conservation and environmental protection technological modification projects, and merger and acquisition projects. It is expected that the production capacities of clinker and cement will be increased by 1.80 million tonnes and 6.80 million tonnes respectively.

In respect of operation management, the Group will pay close attention to the domestic and international macroeconomic situation, coordinate the promotion of epidemic prevention

16 and control and production and operation management, seize the trend of the cement industry, and deeply research and assess on the market supply and demand situation, promote marketing model innovation, optimize logistics resource configuration, and strengthen the control over the end-user market. The Group will fully capitalize in the domestic and international markets and focus on the global resource allocation; continue to properly carry out the traceability and source control of bulk raw materials, deepen strategic cooperation with large-scale coal companies, pay great attention to the guaranteed supply of key resources, expand the development and use of the alternative resources, and strive to reduce the comprehensive procurement cost. The Group will also implement the "green building materials" strategy, increase investment in environmental protection, accelerate industry transformation and upgrade, promote energy-saving and emission-reducing technological transformation, and promote green and low-carbon development. We will intensify cooperation among industry, universities and research institutes, focus on research of forward-looking technologies, and establish a professional and high-end technology team; deeply promote the informatisation and industrialisation integration and accelerate the transformation of intelligent factory’s results, and comprehensively enhance innovation as the driving force; optimize the internal management and control model, strengthen the construction of the talent team, enhance the incentive and appraisal mechanism, stimulate innovation and creativity of talents to drive the Company's high-quality development.

The Group plans to achieve a net sales volume (net of trading volume) of 325 million tonnes of cement and clinker for 2021, approximately the same on a year-on-year basis. It is expected that the cost of products per tonne will increase slightly and the expenses of products per tonne will remain generally stable.

In 2021, the Group may be exposed to the following four major risks:

1. The cement industry in which the Company operates is relatively highly reliant on the construction industry and is relatively closely related to the growth rates of property investment. As the state further tightens regulation on the real estate industry, the real estate industry is facing downward pressure, which may adversely affect the market demand for cement.

To address the above-mentioned risks, the Group will closely monitor changes in the country’s macro-economic conditions, enhance its study and assessment on market supply and demand condition, further intensify end-user market development, strengthen coordination of integrated regional marketing efforts, and capture the increasing demands driven by the government’s policy of infrastructure investment to boost economic growth, in an effort to increase its market share.

2. The state will continue to strengthen pollution prevention and control and ecological construction and consolidate the achievements of Blue Sky, Clean Water and Rich Soil Protection Campaign, thereby environmental protection management and control will still

17 remain under high pressure. The introduction of new environmental protection policies such as peaking carbon emission and carbon neutrality puts forward higher requirements for low-carbon environmental protection management of cement companies, which promotes green and sustainable development and at the same time production and operation costs of enterprises is expected to be increased.

To address the above-mentioned risks, the Group will study thoroughly and comply with the state’s laws and regulations in relation to environmental protection, continue to increase investment in environmentally-friendly technology modification, continue to push forward the improvement of SCR denitration, noise abatement and the modification of dust collection. We will study and formulate a medium to long-term solution for lowering carbon emission, so as to strengthen the advanced environmental protection technologies, accelerate industry transformation, thereby upgrading and promoting the green and low-carbon development.

3. The cost of coal and electricity accounts for a relatively high percentage of the production cost of clinker. Any substantial surge in coal price due to factors such as policy adjustment or changes in market supply-and-demand condition will result in increasing production costs for the Group. If the increase in cost resulting from the above factors could not be entirely transferred to the product price, the Company’s profitability will be affected to certain extent.

In order to address the above-mentioned risks, the Group will strive to reduce the procurement costs of raw material and fuel to the maximum extent by conducting in-depth study and assessment on the changes of the trend for the market supply and demand for coal and other raw material and fuel, strengthening strategic cooperation with large-scale coal corporations, expanding resource channels via long-term agreements, increasing proportion of procuring of high-quality resources, and implementing cross-regional planning and allocation of coal resources. Meanwhile, the Group will strengthen technological improvement on energy conservation and consumption reduction, and continue to enhance the refined management of production lines, so as to ensure continuous optimization of the indicators of coal and electricity consumption and reduce the costs of coal and electricity.

4. Affected by the continuous spread and repeated relapse of the epidemic overseas, which bring inconveniences to the Company's overseas projects in terms of labor dispatch and research and demonstration, project implementation is subject to certain uncertainties. If the epidemic is not effectively prevented and controlled overseas for a long time, the Company's international development strategy may progress slowly as a result.

To address the above-mentioned risks, the Company will closely monitor the international epidemic situation, strive to overcome difficulties, fully capitalize in the international and domestic markets, strengthen the overall allocation of resources, pool the efforts of all stakeholders to improve the quality of overseas project operations. With a more open mind,

18 we will actively seek more opportunities for international development in the post-epidemic era. VIII. Profit appropriation proposal

Based on the financial data prepared in accordance with the PRC Accounting Standards and IFRSs respectively, the Group’s profit after tax and minority interests for the year 2020 amounted to RMB35,129.69 million and RMB35,163.54 million respectively. The Board of the Company proposed the appropriation of the profit for the year ended 31 December 2020 as follows:

(1) Pursuant to the requirements of the Companies Law of the PRC and the Articles of the Association of the Company , the Company shall allocate 10% of its profit after tax for the year to the statutory surplus reserve, provided that no allocation is required if the accumulated statutory surplus reserve exceeds 50% of the registered capital of the Company. As the statutory surplus reserve had reached 50% of the registered capital of the Company, no allocation was made for the year 2020.

(2) Based on the Company’s total number of issued shares of 5,299,302,579 shares in its share capital as at 31 December 2020, the payment of a final dividend of RMB2.12 per share (tax inclusive) is proposed, totaling RMB11,234.52 million.

(3) The date of payment of final dividend to the holders of the Company’s H Shares is expected to be around Thursday, 24 June 2021. Details of the payment of final dividend will be set out in the circular of the Company in respect of profit appropriation and other matters to be despatched to its shareholders in due course.

The above profit appropriation proposal is subject to consideration and approval by shareholders at the annual general meeting for year 2020. IX. Financial Information

Financial information extracted from the audited consolidated statement of profit or loss and consolidated statement of profit or loss and other comprehensive income of the Group for the year ended 31 December 2020 and audited consolidated statement of financial position of the Group at 31 December 2020 together with the 2019 comparative figures, prepared in accordance with IFRSs and presented on the basis described in Note 4(1) below are as follows:

19 1. Consolidated statement of profit or loss for the year ended 31 December 2020

Note 2020 2019 RMB’000 RMB’000

Revenue 4(3) 176,242,682 157,030,328

Cost of sales and services rendered (126,100,500) (106,124,123)

Gross profit 50,142,182 50,906,205

Other revenue 4(4) 4,852,037 3,316,740 Other net income 4(4) 766,457 491,044 Selling and marketing costs (4,123,287) (4,416,575) Administrative expenses (4,851,418) (6,109,168)

Profit from operations 46,785,971 44,188,246

Finance costs 4(5)(a) (446,777) (446,008) Share of profits of an associate 377,264 381,610 Share of profits of joint ventures 427,223 472,013

Profit before taxation 4(5) 47,143,681 44,595,861

Income tax 4(6)(b) (10,737,738) (10,204,839)

Profit for the year 36,405,943 34,391,022

20 1. Consolidated statement of profit or loss (contd.) for the year ended 31 December 2020

Note 2020 2019 RMB’000 RMB’000

Attributable to: Equity shareholders of the Company 35,163,538 33,629,803 Non-controlling interests 1,242,405 761,219

Profit for the year 36,405,943 34,391,022

Earnings per share 4(8)

- Basic RMB6.64 RMB6.35

- Diluted RMB6.64 RMB6.35

21 2. Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2020 Note 2020 2019 RMB’000 RMB’000

Profit for the year 36,405,943 34,391,022 ------

Other comprehensive income for the year (after tax and reclassification adjustments)

Item that will not be reclassified to profit or loss:

Equity investments at fair value through other comprehensive income (“FVOCI”) – net movement in fair value reserve (non-recycling) 110,949 (3,270)

Items that may be reclassified subsequently to profit or loss:

Exchange differences on translation of financial (213,625) 31,816 statements of overseas subsidiaries

Share of other comprehensive income of investees 7,283 10,014

Other comprehensive income for the year (95,393) 38,560 ------

Total comprehensive income for the year 36,310,550 34,429,582

Attributable to: Equity shareholders of the Company 35,096,554 33,663,063 Non-controlling interests 1,213,996 766,519

Total comprehensive income for the year 36,310,550 34,429,582

22 3. Consolidated statement of financial position

Note 31 December 2020 31 December 2019 RMB’000 RMB’000 RMB’000 RMB’000 Non-current assets

Property, plant and equipment - Investment properties 84,159 85,734 - Other property, plant and equipment 72,752,905 70,163,505 Intangible assets 8,496,930 5,048,093 Goodwill 576,042 514,398 Interest in an associate 2,370,857 2,057,501 Interests in joint ventures 1,852,183 1,763,112 Loans and receivables 459,716 374,312 Long-term prepayments 31,366 133,000 Financial assets measured at FVOCI 391,241 326,096 Deferred tax assets 851,777 1,099,391

87,867,176 81,565,142 ------

Current assets Inventories 7,001,615 5,571,523 Assets held for sale - 9,811 Trade and bills receivables 4(9) 10,888,831 12,995,665 Financial assets measured at fair value through profit and loss (“FVPL”) 26,882,714 16,782,737 Prepayments and other receivables 5,802,159 6,495,639 Amounts due from related parties 292,154 347,819 Tax recoverable 60,941 31,768 Restricted cash deposits 539,881 459,336 Bank deposits with original maturity over three months 44,960,903 32,503,597 Cash and cash equivalents 16,676,384 22,014,145

113,105,582 97,212,040 ------

23 3. Consolidated statement of financial position (contd.)

Note 31 December 2020 31 December 2019 RMB’000 RMB’000 RMB’000 RMB’000 Current liabilities

Trade payables 4(10) 4,565,797 7,145,833 Other payables and accruals 7,429,267 8,248,581 Current portion of long-term payables 519,477 437,358 Contract liabilities 4,237,555 3,492,486 Bank loans and other borrowings 3,109,211 3,917,815 Lease liabilities 17,107 20,275 Amounts due to related parties 383,924 263,521 Current taxation 3,960,783 3,895,321

24,223,121 27,421,190 ------

Net current assets 88,882,461 69,790,850

Total assets less current liabilities 176,749,637 151,355,992

Non-current liabilities

Bank loans and other borrowings 6,808,050 7,369,346 Lease liabilities 23,323 34,833 Long-term payables 397,439 458,132 Deferred income 686,349 639,134 Deferred tax liabilities 771,567 723,773

8,686,728 9,225,218

NET ASSETS 168,062,909 142,130,774

24 3. Consolidated statement of financial position (contd.)

Note 31 December 2020 31 December 2019 RMB’000 RMB’000 RMB’000 RMB’000 CAPITAL AND RESERVES

Share capital 5,299,303 5,299,303 Reserves 156,381,492 131,887,099

Total equity attributable to equity shareholders of the Company 161,680,795 137,186,402

Non-controlling interests 6,382,114 4,944,372

TOTAL EQUITY 168,062,909 142,130,774

Approved and authorised for issue by the board of directors on 25 March 2021.

25 4. Notes

(1) Basis of preparation of the financial statements

The consolidated financial statements for the year ended 31 December 2020 comprise the Company and its subsidiaries and the Group’s interests in associates and joint ventures. The measurement basis used in the preparation of the financial statements is the historical cost basis except that the following assets and liabilities are stated at their fair value as explained in the accounting policies set out below:

- equity investments; - bank acceptance notes receivable measured at FVOCI; and - derivative financial instruments

Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell.

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(2) Changes in accounting policies

The Group has applied the following amendments to IFRSs issued by the IASB to these financial statements for the current accounting period:

Amendments to IFRS 3, Definition of a Business

Amendments to IFRS 9, IAS 39 and IFRS 7, Interest Rate Benchmark Reform

Amendments to IAS 1 and IAS 8, Definition of Material

Amendment to IFRS 16, Covid-19-Related Rent Concessions

None of these developments have had a material effect on how the Group’s results and financial position for the current or prior periods have been prepared or presented. Other than the amendment to IFRS 16, the Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

26 (3) Revenue and segment reporting

(a) Revenue

The principal activities of the Group are the manufacturing, sale and trading of clinker and cement products. Further details regarding the Group’s revenue from principal activities are disclosed below.

(i) Disaggregation of revenue

Disaggregation of revenue from contracts with customers by major products or service lines is as follows:

2020 2019 RMB’000 RMB’000 Revenue from contracts with customers within the scope of IFRS 15

Disaggregated by service lines - Sales of clinker and cement products 106,885,455 109,765,715 - Trading of clinker and cement products 41,068,234 38,348,548 - Trading of other materials 27,674,828 8,624,507 - Service income 614,165 291,558

176,242,682 157,030,328

Disaggregated by geographical location of customers - Eastern China 63,461,938 47,439,666 - Central China 50,872,149 53,151,970 - Southern China 24,737,220 22,493,348 - Western China 34,184,978 31,239,428 - Overseas 2,986,397 2,705,916

176,242,682 157,030,328

Disaggregation of revenue from contracts with customers by the timing of revenue recognition is disclosed in note 4(3)(b).

The Group’s customer base is diversified and there is no single customer with whom transactions have exceeded 10% of the Group’s revenue.

27 (3) Revenue and segment reporting (contd.)

(ii) Revenue expected to be recognised in the future arising from contracts with customers in existence at the reporting date.

The Group has applied the practical expedient in paragraph 121 of IFRS 15 to its sales contracts for clinker and cement products such that the above information does not include information about revenue that the Group will be entitled to when it satisfies the remaining performance obligations under the contracts for sales of clinker and cement products that have an original expected duration of one year or less.

(b) Segment reporting

The Group manages its businesses by divisions, which are organised by geography. In a manner consistent with the way in which information is reported internally to the Group’s most senior executive management for the purposes of resource allocation and performance assessment, the Group has presented the following five reportable segments based on the region in which the Group’s business operates: Eastern China, Central China, Southern China, Western China and overseas. All segments are primarily engaged in manufacture and sale of clinker and cement products. No operating segments have been aggregated to form the following reportable segments.

(i) Segment results, assets and liabilities

For the purposes of assessing segment performance and allocating resources between segments, the Group’s senior executive management monitors the results, assets and liabilities attributable to each reportable segment on the following bases:

Segment assets include all assets in the financial statements prepared in accordance with Accounting Standards for Business Enterprises or referred to as China Accounting Standards (“CAS”) issued by the Ministry of Finance of the PRC. Segment liabilities include all liabilities in the financial statements prepared in accordance with CAS.

Revenue and expenses are allocated to the reportable segments with reference to sales generated by those segments and the expenses incurred by those segments or which otherwise arise from the depreciation or amortization of assets attributable to those segments in accordance with CAS.

The measure used for reporting segment profit is profit before taxation in accordance with CAS.

In addition to receiving segment information concerning profit before taxation, management is provided with segment information concerning revenue (including inter-segment revenue), interest income and expense from cash balances and borrowings managed directly by the segments, depreciation, amortization and impairment losses and additions to non-current segment assets used by the segments in their operations. Inter-segment revenue are priced with reference to prices charged to external parties for similar orders.

28 (3) Revenue and segment reporting (contd.)

Disaggregation of revenue from contracts with customers by the type and timing of revenue recognition, as well as information regarding the Group’s reportable segments as provided to the Group’s most senior executive management for the purposes of resource allocation and assessment of segment performance for the years ended 31 December 2020 and 2019 is set out below.

For the year ended 31 December 2020

Eastern Central Southern Western China China China China Overseas Subtotal Elimination Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Disaggregated by type of business

Sales of clinker, cement products 30,803,856 35,182,912 19,033,746 19,715,391 2,546,286 107,282,191 - 107,282,191 and other materials Trading 32,181,417 15,623,567 5,692,393 14,431,866 417,083 68,346,326 - 68,346,326 Service Income 476,665 65,670 11,081 37,721 23,028 614,165 - 614,165

Revenue from external customers 63,461,938 50,872,149 24,737,220 34,184,978 2,986,397 176,242,682 - 176,242,682

Disaggregated by timing of revenue recognition Point in time 62,985,273 50,806,479 24,726,139 34,147,257 2,963,369 175,628,517 - 175,628,517 Over time 476,665 65,670 11,081 37,721 23,028 614,165 - 614,165

Revenue from external customers 63,461,938 50,872,149 24,737,220 34,184,978 2,986,397 176,242,682 - 176,242,682

Inter-segment revenue 5,008,921 24,612,598 396,199 650,657 546,605 31,214,980 (31,214,980) -

Reportable segment revenue 68,470,859 75,484,747 25,133,419 34,835,635 3,533,002 207,457,662 (31,214,980) 176,242,682

Reportable segment profit (profit before taxation) 6,354,047 49,446,251 7,921,658 6,306,022 475,131 70,503,109 (23,395,192) 47,107,917

29 (3) Revenue and segment reporting (contd.)

For the year ended 31 December 2020

Eastern Central Southern Western China China China China Overseas Subtotal Elimination Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Interest income 17,451 2,387,226 14,199 19,695 25,445 2,464,016 (239,399) 2,224,617 Interest expense (64,456) (288,510) (45,963) (103,742) (191,663) (694,334) 247,557 (446,777) Depreciation and amortisation for the year 495,325 2,212,665 818,390 1,501,497 419,775 5,447,652 (18,089) 5,429,563

Reportable segment assets (including interests in an associate and joint ventures) 17,871,308 175,972,281 22,365,401 28,065,334 12,695,193 256,969,517 (55,996,759) 200,972,758

Investment in an associate and joint ventures - 1,568,969 - 2,370,857 283,214 4,223,040 - 4,223,040

Additions to non-current segment assets during the year 377,448 6,453,411 3,117,488 1,743,607 488,302 12,180,256 - 12,180,256

Reportable segment liabilities 11,570,513 22,655,093 8,937,461 12,686,518 9,390,044 65,239,629 (32,483,690) 32,755,939

30 (3) Revenue and segment reporting (contd.)

For the year ended 31 December 2019

Eastern Central Southern Western China China China China Overseas Subtotal Elimination Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Disaggregated by type of business

Sales of clinker, cement products and other materials 29,935,647 37,421,119 19,578,262 21,516,027 2,439,750 110,890,805 - 110,890,805 Trading 17,368,828 15,613,851 2,900,056 9,699,064 266,166 45,847,965 - 45,847,965 Service Income 135,191 117,000 15,030 24,337 - 291,558 - 291,558

Revenue from external customers 47,439,666 53,151,970 22,493,348 31,239,428 2,705,916 157,030,328 - 157,030,328

Disaggregated by timing of revenue recognition

Point in time 47,304,475 53,034,970 22,478,318 31,215,091 2,705,916 156,738,770 - 156,738,770 Over time 135,191 117,000 15,030 24,337 - 291,558 - 291,558

Revenue from external customers 47,439,666 53,151,970 22,493,348 31,239,428 2,705,916 157,030,328 - 157,030,328

Inter-segment revenue 7,425,653 26,785,893 470,393 530,258 109,015 35,321,212 (35,321,212) -

Reportable segment revenue 54,865,319 79,937,863 22,963,741 31,769,686 2,814,931 192,351,540 (35,321,212) 157,030,328

Reportable segment profit (profit before taxation) 5,253,523 30,367,478 6,737,349 5,848,566 473,727 48,680,643 (4,123,798) 44,556,845

31 (3) Revenue and segment reporting (contd.)

For the year ended 31 December 2019

Eastern Central Southern Western China China China China Overseas Subtotal Elimination Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Interest income 16,030 1,962,310 15,312 25,726 5,657 2,025,035 (436,203) 1,588,832 Interest expense (37,873) (232,061) (168,027) (211,093) (244,362) (893,416) 447,408 (446,008) Depreciation and amortisation for the year (511,066) (2,094,397) (770,265) (1,514,631) (396,738) (5,287,097) 16,134 (5,270,963) Impairment losses of property, plant and equipment 258,719 70,767 - 834,724 - 1,164,210 - 1,164,210

Reportable segment assets (including interests in associates and joint ventures) 17,510,170 136,183,811 18,671,860 26,813,216 12,633,079 211,812,136 (33,034,954) 178,777,182

Investment in associates and joint ventures - 1,559,921 - 2,057,501 203,191 3,820,613 - 3,820,613

Additions to non-current segment assets during the year 1,881,476 3,098,887 827,040 1,925,937 2,156,471 9,889,811 - 9,889,811

Reportable segment liabilities 8,960,453 16,248,054 4,302,459 7,401,124 10,388,395 47,300,485 (10,843,751) 36,456,734

32 (3) Revenue and segment reporting (contd.)

(ii) Reconciliations of reportable segment revenues, profit, assets and liabilities to the consolidated figures as reported in the consolidated financial statements

2020 2019 RMB’000 RMB’000 Revenue Reportable segment revenue 176,242,682 157,030,328

Consolidated revenue 176,242,682 157,030,328

2020 2019 RMB’000 RMB’000 Profit Reportable segment profit (profit before taxation) 47,107,917 44,556,845 Difference between CAS and IFRS* 35,764 39,016

Consolidated profit before taxation 47,143,681 44,595,861

2020 2019 RMB’000 RMB’000

Assets Reportable segment assets 200,972,758 178,777,182

Consolidated total assets 200,972,758 178,777,182

2020 2019 RMB’000 RMB’000

Liabilities Reportable segment liabilities 32,755,939 36,456,734 Difference between CAS and IFRS* 153,910 189,674

Consolidated total liabilities 32,909,849 36,646,408

* The difference mainly arises from deferred income in respect of certain government grants recognised in profit and loss under IFRS.

33 (3) Revenue and segment reporting (contd.)

(iii) Geographic information

The following table sets out information about the geographical location of (i) the Group’s revenue from external customers and (ii) the Group’s property, plant and equipment, intangible assets, goodwill, interests in an associate and joint ventures, loans and receivables (“specified non-current assets”). The geographical location of customers is based on the location at which the services were provided or the goods delivered to. The geographical location of the specified non-current assets is based on the physical locations of the assets or the locations of the operations.

Revenue Specified from external customers non-current assets 2020 2019 2020 2019 RMB’000 RMB’000 RMB’000 RMB’000

The PRC 172,662,044 152,894,657 78,229,183 71,894,284 Others 3,580,638 4,135,671 8,520,736 8,347,807

176,242,682 157,030,328 86,749,919 80,242,091

(4) Other revenue and other net income

2020 2019 RMB’000 RMB’000

Other revenue

Interest income on financial assets measured at amortised cost 2,224,617 1,588,832 Subsidy income* 1,927,178 1,401,192 Investment income on wealth management products issued by bank 700,242 326,716

4,852,037 3,316,740

* Subsidy income comprises refunds of value-added tax in connection with sales of certain cement products and government grants received.

34 (4) Other revenue and other net income (contd.)

2020 2019 RMB’000 RMB’000

Other net income

Net gain/(loss) on disposal of property, plant and equipment 810,517 (68,356) Net realised and unrealised loss on derivative financial instruments (525) (24,615) Net realised and unrealised gain on wealth management products 100,501 282,212 Net gain on liquidation of a subsidiary and liquidation of investment in an associate 45,764 28,742 Net exchange (loss)/gain (260,561) 205,689 Others 70,761 67,372

766,457 491,044

(5) Profit before taxation

Profit before taxation is arrived at after charging/(crediting):

2020 2019 RMB’000 RMB’000

(a) Finance costs

Interest on bank loans and other borrowings 458,122 444,301 Interest on lease liabilities 2,353 2,798

Interest expense on financial liabilities not at FVPL 460,475 447,099

Less: Interest expense capitalised into construction-in-progress* (13,698) (1,091)

446,777 446,008

* The borrowing costs have been capitalised at rates of 2.48%~2.64% (2019: 2.48%).

35 (5) Profit before taxation (contd.)

2020 2019 RMB’000 RMB’000

(b) Staff costs*

Salaries, wages and other benefits 7,152,896 6,658,933 Contributions to defined contribution retirement plans 124,066 556,312 Annuity 270,344 233,650

7,547,306 7,448,895

Due to the impact of COVID-19 in 2020, a number of policies including the reduction of social insurance have been promulgated by the government since February 2020 to expedite resumption of economic activities, which resulted in the reduction of certain contributions to defined contribution scheme during the year ended 31 December 2020.

(c) Other items 2020 2019 RMB’000 RMB’000 Amortisation - intangible assets 303,860 203,535

Depreciation - investment properties 3,464 2,979 - property, plant and equipment 5,122,239 5,064,449

(Reversal of impairment losses)/Impairment losses - trade receivables (3,948) 7,011 - prepayments and other receivables (960) - - property, plant and equipment - 1,164,210

Auditors’ remuneration - audit services 5,500 5,500 - other services 149 195

Research and development costs 646,582 187,199

Cost of inventories* 124,024,705 104,449,113

* Cost of inventories includes RMB8,614,054,000 (2019: RMB8,269,931,000) relating to staff costs, depreciation and amortisation expenses, which amount is also included in the respective total amounts disclosed separately above or in note 4(5)(b) for each of these types of expenses.

36 (6) Income tax in the consolidated statement of profit or loss

(a) Taxation in the consolidated statement of profit or loss represents:

2020 2019 RMB’000 RMB’000

Current tax

Provision for the year 10,545,031 10,112,599 Under/(over)-provision in respect of prior years 11,951 (20,791)

10,556,982 10,091,808 ------Deferred tax

Origination and reversal of temporary differences 180,756 113,031 ------10,737,738 10,204,839

The Company and the Group’s subsidiaries in mainland China are subject to Corporate Income Tax at 25% on taxable income determined according to the relevant income tax rules and regulations, except for:

Pingliang Conch Cement Co., Ltd. 平涼海螺水泥有限責任公司 (Note (i)) 15% Dazhou Conch Cement Co., Ltd. 達州海螺水泥有限責任公司 (Note (i)) 15% Guangyuan Conch Cement Co., Ltd. 廣元海螺水泥有限責任公司(Note (i)) 15% Chongqing Conch Cement Co., Ltd. 重慶海螺水泥有限責任公司 (Note (i)) 15% Liquan Conch Cement Co., Ltd. 禮泉海螺水泥有限責任公司 (Note (i)) 15% Guiyang Conch Panjiang Cement Co., Ltd. 貴陽海螺盤江水泥有限責任公司 (Note (i)) 15% Guiding Conch Panjiang Cement Co., Ltd. 貴定海螺盤江水泥有限責任公司 (Note (i)) 15% Zunyi Conch Panjiang Cement Co., Ltd. 遵義海螺盤江水泥有限責任公司 (Note (i)) 15% Qianyang Conch Cement Co., Ltd. 千陽海螺水泥有限責任公司 (Note (i)) 15% Bazhong Conch Cement Co., Ltd. 巴中海螺水泥有限責任公司 (Note (i)) 15% Wenshan Conch Cement Co., Ltd. 文山海螺水泥有限責任公司 (Note (i)) 15%

37 (6) Income tax in the consolidated statement of profit or loss (contd.)

Longan Conch Cement Co., Ltd. 隆安海螺水泥有限責任公司 (Note (i)) 15% Linxia Conch Cement Co., Ltd. 臨夏海螺水泥有限責任公司 (Note (i)) 15% Tongren Conch Panjiang Cement Co., Ltd. 銅仁海螺盤江水泥有限責任公司 (Note (i)) 15% Guizhou Liukuangruian Cement Co., Ltd. 貴州六礦瑞安水泥有限公司 (Note (i)) 15% Qianxian Conch Cement Co., Ltd. 乾縣海螺水泥有限責任公司 (Note (i)) 15% Qianxinan Resource Development Co., Ltd. 黔西南州發展資源開發有限公司 (Note (i)) 15% Sichuan Nanwei Cement Co., Ltd. 四川南威水泥有限公司 (Note (i)) 15% Yunnan Zhuangxiang Cement Co., Ltd. 雲南壯鄉水泥股份有限公司 (Note (i)) 15% Liangping Conch Cement Co., Ltd. 梁平海螺水泥有限責任公司 (Note (i)) 15% Baoji Zhongxi Jinlinghe Cement Co., Ltd. 寶雞市眾喜金陵河水泥有限公司 (Note (i)) 15% Baoji Zhongxi Fenghuangshan Cement Co., Ltd. 寶雞眾喜鳳凰山水泥有限公司 (Note (i)) 15% Guangxi Lingyun Tonghong Cement Co., Ltd. 廣西淩雲通鴻水泥有限公司 (Note (i)) 15% Baoshan Conch Cement Co., Ltd. 保山海螺水泥有限責任公司 (Note (i)) 15% Ganzhou Conch Cement Co., Ltd. 贛州海螺水泥有限責任公司 (Note (i)) 15% Hami Hongyi Construction Co., Ltd. 哈密弘毅建材有限責任公司 (Note (i)) 15% Yingjiangyunhan Cement Co., Ltd. 盈江縣允罕水泥有限責任公司 (Note (i)) 15% Kunming Conch Cement Co., Ltd. 昆明海螺水泥有限公司 (Note (i)) 15% Shaanxi Tongchuan Fenghuang Construction Co., Ltd. 陝西銅川鳳凰建材有限公司 (Note (i)) 15% Chongqing Conch Material Trading Co., Ltd. 重慶海螺物資貿易有限責任公司 (Note (i)) 15% Tongchuan Conch New Material Co., Ltd. 銅川海螺新材料有限責任公司 (Note (i)) 15% Basu Conch Cement Co., Ltd. 八宿海螺水泥有限責任公司 (Note (i)) 15%

38 (6) Income tax in the consolidated statement of profit or loss (contd.)

Anhui Wuhu Conch Construction and Installation Co., Ltd. (“Conch Construction”) 安徽蕪湖海螺建築安裝工程有限責任公司 (Note (ii)) 15% Anhui Conch Siam Refractory Material Co., Ltd. (“Refractory Material”) 安徽海螺暹羅耐火材料有限公司 (Note (ii)) 15%

Notes: (i) Pursuant to Notice No.4 issued by the State Administration of Taxation of PRC on 10 March 2015 and relevant local tax authorities’ notices, these companies are entitled to a preferential income tax rate of 15% as qualifying companies located in western areas in the PRC. These companies mentioned above are entitled to a preferential income tax rate of 15% in 2020 (2019: 15%).

(ii) Pursuant to Chapter 28 of the Law of the PRC on Enterprise Income Tax, enterprises are entitled to a preferential income tax rate of 15% after the recognition of high and new technology enterprise.

Conch Construction has obtained a high and new technology enterprise certification in 2015 and obtained a renewed certification in 2018. Accordingly, it is entitled to a preferential income tax rate of 15% from 2018 to 2020.

Refractory Material has obtained a high and new technology enterprise certification in 2016 and obtained a renewed certification in 2019. Accordingly, it is entitled to a preferential income tax rate of 15% from 2019 to 2021.

The corporate income tax rates of the subsidiaries of the Group outside mainland China are as following:

Subsidiaries’ Name Tax rates Conch International Holding (HK) Co., Ltd., a subsidiary in Hong Kong 16.5% Luangprabang Conch Cement Co., Ltd. and Vientiane Conch Cement Co., Ltd., subsidiaries in Laos 24% Conch Cement Volga Limited Liability Company, a subsidiary in Russia 20% Battambang Conch Cement Company Limited (“Battambang Conch”). a subsidiary in Cambodia (Note (i)) 20% Qarshi Conch Cement Limited Liability Company, a subsidiary in Uzbekistan 7.5% Conch KT Cement (Phnom Penh) Company Limited, a subsidiary in Cambodia 20% Note: (i) Battambang Conch was accredited as a Qualified Investment Project by the Cambodian Development Council in April 2016. According to local investment laws, it can enjoy income tax exemption for 9 years from the year when the company generates its revenue and income tax exemption for 6 years from the year when the company generates its profit, whichever is shorter. Battambang Conch started sales in 2018 and became profitable in 2019. According to the policy, the income tax-free period for Battambang Conch is from 2018 to 2024.

39 (6) Income tax in the consolidated statement of profit or loss (contd.)

(b) Reconciliation between actual tax expense and accounting profit at applicable tax rate:

2020 2019 RMB’000 RMB’000

Profit before taxation 47,143,681 44,595,861

Notional tax on profit before taxation calculated at 25% (2019: 25%) 11,785,920 11,148,965 Tax effect of subsidiaries subject to tax rates other than 25% (823,890) (766,080) Tax effect of non-deductible expenses 13,018 12,957 Tax effect of non-taxable income (211,325) (221,314) Effect on deferred tax balances at 1 January resulting from a change in tax rate - 12,268 Under/(over)-provision in respect of prior years 11,951 (20,791) Others (37,936) 38,834

Actual tax expense 10,737,738 10,204,839

(7) Dividends

(a) Dividends payable to equity shareholders of the Company attributable to the year:

2020 2019 RMB’000 RMB’000

Final dividend proposed after the statement of financial position date of RMB2.12 (2019: RMB2.00) per ordinary share 11,234,521 10,598,605

The final dividend proposed for shareholders’ approval after the end of the Reporting Period has not been recognised as a liability at the end of the Reporting Period.

(b) Dividends payable to equity shareholders of the Company attributable to the previous financial year, approved and paid during the year:

2020 2019 RMB’000 RMB’000

Final dividend in respect of the previous financial year, approved and paid during the year, of RMB2.00 (2019: RMB1.69) per ordinary share 10,598,605 8,955,821

40 (8) Earnings per share

(a) Basic earnings per share

The calculation of basic earnings per share is based on the profit attributable to ordinary equity shareholders of the Company for the year ended 31 December 2020 of RMB35,163,538,000 (2019: RMB33,629,803,000) and the weighted average number of shares in issue during the year ended 31 December 2020 of 5,299,303,000 shares (2019: 5,299,303,000 shares).

(b) Diluted earnings per share

The Company had no dilutive potential ordinary shares outstanding during the years ended 31 December 2020 and 2019, therefore, diluted earnings per share is the same as the basic earnings per share.

(9) Ageing analysis of trade receivables

The following ageing analysis of trade debtors (net of loss allowance) are based on invoice date as of the end of the Reporting Period: 31 December 2020 31 December 2019 RMB’000 RMB’000

Within 1 year 1,201,451 1,257,023 1 to 2 years 865 12,654

1,202,316 1,269,677

Trade debtors are due within 30 to 60 days from the date of billing, except for retention money in respect of certain sales contracts which is due upon the expiry of the retention period. Bank acceptance notes receivable are due within 1 year from the date of issuance. (10) Ageing analysis of trade payables

Included in trade payables are trade creditors with the following ageing analysis based on invoice date at the end of the Reporting Period:

31 December 2020 31 December 2019 RMB’000 RMB’000

Within 1 year (inclusive) 4,565,797 7,136,013 Between 1 year and 2 years (inclusive) - 6,270 Between 2 years and 3 years (inclusive) - 89 Over 3 years - 3,461

4,565,797 7,145,833

41 (11) Business combinations

During the year ended 31 December 2020, a 51% owned subsidiary of the Group acquired one significant subsidiary, namely Wuhu South Cement through business combination. Details of the acquired subsidiary are as follows:

Name of the company Voting right/ Date of acquisition Principal activities effective equity interests

Wuhu South Cement 51%/ 30 April 2020 Manufacture and 26.01% sale of clinker and cement products Summary of net assets acquired in Wuhu South Cement and the goodwill arising at the acquisition date are as follows:

Fair value of identifiable assets acquired and liabilities assumed: Wuhu South Cement RMB’000

Property, plant and equipment 1,183,164 Intangible assets 430,485 Long-term prepayments - Deferred tax assets 1,609 Inventories 45,196 Tax recoverable 332 Trade receivables, prepayments and other receivables 35,277 Cash and cash equivalents 14,519 Trade payables and other liabilities (926,543) Deferred tax liabilities (96,309)

Total net identifiable assets of the acquiree 687,730

Goodwill

Goodwill has been recognised as a result of the acquisition of Wuhu South Cement as follows: Wuhu South Cement RMB’000

Total cash consideration 412,386 Non-controlling interests, based on their proportionate interest in recognised amount of the assets and liabilities of the acquiree 336,988 Fair value of net identifiable assets (687,730)

Goodwill arising from the above acquisition 61,644

42 (11) Business combinations (contd.)

The goodwill arises from the acquisition represents the benefits of expected synergies to be achieved from integrating the business into the Group’s existing business, future market development potential and the acquired workforce.

During the period from the acquisition date to 31 December 2020, Wuhu South Cement contributed revenue of RMB1,238,061,000 and net profit of RMB360,874,000 to the Group’s results. Had the acquisition occurred on 1 January 2020, management estimates that the consolidated revenue of the Group for the year ended 31 December 2020 would have been RMB176,861,713,000 and the consolidated net profit for the year would have been RMB36,550,616,000. In determining these amounts, management has assumed that the fair value adjustments that arose on the acquisition date would remain the same as if the acquisition had occurred on 1 January 2020.

(12) Contingent liabilities

At 31 December 2020, outstanding letters of credit issued by the Group amounted to RMB 142,146,000 (2019: RMB145,297,000). The directors do not consider it probable that the outstanding letters of credit issued would cause additional financial risk.

At 31 December 2020, the Group has issued guarantees to banking facilities of its related parties, PT SDIC Papua Cement Indonesia and Myanmar Conch Cement Company Limited, amounting to RMB899,095,000 in aggregate (2019: RMB1,061,695,000). These facilities were utilised to the extent of RMB899,095,000 (2019: RMB1,061,695,000) as at 31 December 2020. The directors do not consider it probable that a claim will be made against the Group under any of these guarantees.

By Order of the Board Anhui Conch Cement Company Limited Chairman Gao Dengbang

Wuhu City, Anhui Province, the PRC 25 March 2021

As at the date of this announcement, the Board comprises (i) Mr Gao Dengbang, Mr Wang Jianchao, Mr Wu Bin and Mr Li Qunfeng as executive Directors; (ii) Mr Ding Feng as non-executive Director; (iii) Mr Leung Tat Kwong Simon, Ms Zhang Yunyan and Mr Zhang Xiaorong as independent non-executive Directors.

* The English translation of the PRC entities included in this announcement is for identification purpose only.

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